Subscribers up, profit down at TWC

Revenue up 5% due to growth in advanced services

Time Warner posts fall in profits
TW film co-financier hit by crunch

NEW YORK -- Time Warner Cable's first-quarter profit dropped 31% to $184 million, driven by $82 million in charges and write-downs, while its subscriber metrics beat market expectations.

Revenue at the second-largest U.S. cable operator rose 5% to $4.36 billion thanks in part to continued growth in advanced services.

In a conference call, CEO Glenn Britt called cable "a great business" that is holding up well during the recession. "We're growing when many companies and many industries are shrinking," he said.

Time Warner Cable surprised Wall Street by adding 36,000 basic-cable subscribers in the quarter; analysts had expected a decline.

It also signed up 225,000 net new broadband customers and 166,000 telephony users, exceeding many analysts' expectations.

Sanford C. Bernstein analyst Craig Moffett called the results "stellar," saying Time Warner Cable remains his preferred stock pick with an "outperform" rating and a target price of $39.

Management didn't comment on recent reports it is looking at a possible acquisition of online video firm Joost. Britt said his company is focusing on retaining its investment-grade credit rating and reducing debt.

Time Warner Cable shares closed up 14.2% at $31.12. Goldman Sachs analyst Ingrid Chung said investors should take advantage of this "opportunity to sell as we believe that the first quarter will be the best quarter of 2009 for TWC."